Infrastructure Complementarities and Local Economic Growth: Evidence from Electrification and Highway Construction in Brazil

Harris Selod, Jevgenijs Steinbuks, Ian Michael Trotter and Brian Blankespoor

No 10785, Policy Research Working Paper Series from The World Bank

Abstract: This paper uses four decades of data on Brazilian municipalities to study the separate and joint impacts of highway and electricity infrastructure access on local economic outcomes. The identification strategy employs difference-in-difference estimators with staggered adoption design. The results show strong contemporaneous effects of electrifying municipalities that already have access to a highway, whereas electrification or highway provision alone may, at best, have no effect. Infrastructure investments also facilitated long-lasting structural transformation effects, with both types of infrastructure access spurring growth of the industrial output share.

Date: 2024-05-23
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